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Posts Tagged ‘shareholder value’

In October, the New York Times ran a story comparing how older large corporations–the recently bankrupted Sears, in particular–were more generous to their lower-rung employees than are the newer ones–Amazon, in particular. Sears (the Amazon of its day) had offered more in wages, benefits, and stock options. The Times story failed to point out the important, and invisible to most Americans, sea change in business that fostered such differences: the triumph of “shareholder value.”

Shareholder value is the doctrine that officials of a publicly-held corporation must focus on maximizing the value of its shares rather than act in the interests of workers, suppliers, customers, the local community, society at large, the environment, themselves as managers, or the corporation itself. The ascendancy of this guiding principle since about 1970s has boosted inequality by making investors and management much wealthier and by weakening workers and localities. Dealing with this idea is one of the challenges facing those who seek to reverse growing inequality.

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